The heat is on Liechtenstein as more countries band
together to combat the country's allowance of money from anywhere.ZURICH (Reuters) -
International pressure on the Alpine mini-state Liechtenstein mounted
on Tuesday as more countries including France and Australia banded
together to combat tax evasion.
That brings to at least 10 the number of nations either
investigating or demanding that the principality overhaul the secrecy
code that has lured thousands of wealthy investors and earned it a spot
on an international blacklist of tax havens.
"Tax evasion is not a victimless crime. Honest citizens have to meet
the cost of the tax that is evaded by a minority who are dishonest,"
said Dave Hartnett, acting chairman of the Australian revenue and
customs authority, in a statement.
Germany, Europe's largest country, has led the charge against the
postage-stamp-sized Liechtenstein and threatened to spread the battle
against Switzerland, Luxembourg and Austria as well, as all claim some
form of banking secrecy.
Liechtenstein is one of only three countries to earn a spot on the
blacklist of countries that do not comply with information-sharing
rules set by the Organization for Economic Cooperation and Development,
or the OECD.
"In the light of recent developments involving Liechtenstein bank
accounts, there needs to be a significant move towards full
implementation of OECD standards on transparency and effective exchange
of information in tax matters," Hartnett said.
The OECD has called upon Liechtenstein for years to shed more light
on its murky financial sector, harboring 160 billion Swiss francs in
client assets, and risks earning pariah status if it continues to
stonewall international pleas.
Liechtenstein, a country of 35,000 inhabitants sandwiched between
Austria and Switzerland, was thrust into the public light last week
after Germany arrested a high-profile business leader in connection
with alleged tax evasion using a Liechtenstein account.
Since then, calls have mounted on a daily basis, with France on
Tuesday saying it, too, was examining information on Liechtenstein
accounts.
Countries now openly acting in the tax affair include Australia,
Canada, France, Italy, New Zealand, Sweden, the United Kingdom, the
United States, Germany and the Netherlands.
A spokeswoman for the prinicpality of Liechtenstein declined to comment.
PUBLICITY DRAGNET
Separately, German prosecutors on Tuesday widened their
investigation to a second bank in Liechtenstein. Investigators have
searched about 150 properties in a trawl to prove that up to 1,000
millionaires hid there money in Liechtenstein.
So far, the focus of the probe has been on LGT, a bank owned by
Liechtenstein's billionaire royal family. Germany has said it paid an
informant for bank details of suspected tax evaders. LGT has said only
that secret client information was stolen.
Fears that the dragnet could snare Switzerland, the world's largest
repository for international investments, deepened with stock in one
Swiss bank, Vontobel (VONN.S: Quote, Profile, Research), falling 10 percent at one point on Tuesday on fears it may be implicated.
Shares later trimmed losses but remained in negative territory as
Vontobel said it had no contact with German tax investigators and that
no client data from its Liechtenstein Treuhand AG unit had been stolen
or abused.
Prosecutors in Germany have been investigating tax evasion scams
mainly involving the misuse of so-called foundations or trusts, which
disguise the real owner of the investments.
Prosecutors said on Tuesday that the trusts they were probing held
far more than 200 million euros ($296.4 million) and that "immense"
sums of tax revenue had been dodged.
The probe has already forced the resignation of one of Germany's
best-known business figures -- Deutsche Post Chief Executive Klaus
Zumwinkel. He was taken away from his home by investigators earlier
this month, in a dramatic scene televised throughout Germany.
(Additional reporting by Matthias Inverardi in Duesseldorf, John
O'Donnell in Frankfurt and Albert Schmieder in Zurich; editing by
Elaine Hardcastle)
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